Finding the right business partner isn’t easy. I have been an entrepreneur since I was 18, and I have been through my fair share of business partners. And although I have been blessed with having some great partners, I have also had a few that didn’t work out.
It’s not always a fairy tale ending all the time.
Do you know that business partners , just like finding your Prince Charming (or Princess of your dreams), can become your greatest asset or worst liability?
Deciding whether or not to go into business with someone else may be one of the most important business decisions you ever make. Deciding who you go into business with can be just as important.
Weighing the advantages and disadvantages of having a business partner, and carefully analysing the reasons for choosing a business partner can help ensure that you find the right person to entrust with your business.
Once you make the decision to find a business partner through jointly setting a business or mergers/acquisitions, begin expanding your online and offline network to find the best partner for your business.
You gotta take your time in making a decision, to make sure you find a business partner who really fits with you, your business ideas and your goals.
Finding a business partner
Having built hundreds of partnerships since I began on my journey, I can almost guarantee you with my last dollar that working with a business partner drastically changes the dynamics of running a business.
A great business partner can add a lot to a venture. On the other hand, entrepreneurs can also benefit from going solo.
Having a business partner has advantages and disadvantages. Working with or merging with a partner may or may not benefit you and your business. Consider these points before you decide whether or not to work with a partner or to run your business on your own.
Advantages of Having a Business Partner
1. Access to More Resources
When you work with a business partner, you can do twice as much work. A lot of work goes into building a business. You need to do marketing research, networking, research and development, sales pitches, and meet with potential lenders or investors.
You can certainly imagine that all of these can overwhelm a business owner. In the early stages of a new venture, you may not have the resources to hire employees to assist you. Thus, you may need a partner you can trust to share the burdens of starting a new business.
2. Diversity in Competencies, Experiences and Skills
A business partner may bring an entirely new skill set to the table. One business partner may have a background in engineering and research, while the other excels at sales and marketing or business development.
Taking advantage of utilizing the differing skill sets can help the business succeed. In addition, working with a business partner allows you to divide up tasks according to strengths, conserving time and eliminating duplication of efforts.
3. Different Perspectives to Make a Solid Decision Quickly
Business owners need an outside perspective to avoid a one-dimensional vision. It is always not wise to think that you have the best idea or solution to a problem.
Successful entrepreneurs have faith in their ideas, but may need someone else to put things in perspective. The decision-making process becomes easier and more realistic when two or more people objectively evaluate ideas and share their concerns and feedback.
4. Higher Level of Accountability & Governance
Some people become lackadaisical when they begin a business. They may have a hard time maintaining the discipline needed to stay motivated. Partners keep each other on the ball, and hold each other accountable for any mistakes.
5. More Proactive Ideation and Brainstorming
Business partners talk to each other about their ideas. Many entrepreneurs have trouble maintaining objectivity when initiating a new business idea.
A business partner helps you realistically evaluate new ideas and business plans for potential flaws. Your business partner can also build off your ideas, offering more input to refine your plan, so you have a better chance of succeeding.
6. Networking Opportunities
Networking is a fundamental aspect of business. Every time you meet someone, you have the opportunity to meet even more people through that person’s network. You need many connections to succeed in business.
Having a partner gives you the opportunity to expand your list of contacts, business opportunities and multiply your numbers of potential clients, investors, suppliers, and mentors.
7. Ability to Keeps Things in Perspective
Remember this: it is always a challenge to maintain a state of “zen” or inner peace.
Entrepreneurs often face a roller coaster of “emo-rides”. Sometimes they become too pessimistic and other times they feel overconfident.
Pessimism and too much confidence can both hinder a new business plan. A partner can help you keep everything in perspective and not get distracted by fluctuating emotions.
Disadvantages of Working with a Business Partner
Although working with a business partner can offer you many advantages, choosing to work with someone else also has some downsides.
Always remind yourself that a bad business partnership typically happens when an entrepreneur chooses the wrong partner, or chooses a partner for the wrong reasons.
Some of the disadvantages of working with a business partner include:
1. Different Work Ethics
Many entrepreneurs find themselves working with partners who don’t share their enthusiasm or passion for business.
Partners who can’t meet deadlines, follow up with clients, or follow through with their responsibilities can significantly impact an established business or a new business venture.
Unscrupulous business partners can also contribute to the downfall of a business.
Although you hope to know your partners beforehand, you may not realize their true colors until they have damaged your reputation, stolen money, or got you in some kind of trouble.
2. Lack of Experience
Some business partners don’t have the experience or skills to do their job successfully. When working with a business partner, you need to count on your partner to deliver results.
Working with a business partner who can’t deliver can lead to many disasters down the road, including poorly designed products, angry customers, and potential lawsuits.
3. Disagreement on Direction
A poor choice of a business partner causes major problems for any business. Sometimes, even working with a motivated, talented, and brilliant partner also causes problems. Business partners may disagree on the long-term goals for the company. They may spend weeks or months bickering over key decisions.
Disagreements between partners may distract the team, consume resources, cause stress to other employees or lead to inconsistent business practices.
4. Sharing Rewards and Profits
When you have a business partner, you have to split the profits. Entrepreneurs happily share profits with partners when they bring additional value to the firm.
If your partner does not increase business enough to justify their involvement, however, they shouldn’t receive a share of the profits.
If you make the same amount of money with a partner as you do without a partner, you may have selected the wrong person to help you run your business.
5. Complicated Relationships
When people go into business with someone close to them, they risk damaging the relationship.
Business partners often have differences in opinions. Sometimes, those disagreements can lead to serious misunderstandings.
Because of this, a bad business partnership can devastate a relationship when the partner is a friend, spouse, or family member.
6. Liability for Your Partner’s Actions
You take responsibility for whatever happens in your business. If your partner violates any laws, you may end up in court, too.
When you have a business partner, you have the added stress of making sure you know everything your partner is doing. Even if you and your partner trust each other, you have to monitor your partner’s work, to avoid negligence, misuse, or violations.
You have to make sure you both understand applicable laws and establish a set procedure for running the business.
7. Your Reputation on the Line
Even if your partner doesn’t break the law, his or her actions may come back to haunt you. A shady or dishonest partner may lead to widespread distrust of your company. This may permanently damage your reputation.
People align you and your partner with your business, and the company you keep while building business relationships may negatively reflect upon the reputation of your business.
Moral of the Story
You need to speak with your business partners constantly to ensure you both are on the same page and each knows what the other one is working on.
I believe that ongoing dialogue is so important because it helps to reduce the risk of assumptions and encourages you to stay focused on your shared vision.
Of course, there is likely going to be some miscommunication and disagreement. That’s ok. But I’ve found that open communication with my partners minimises misunderstandings and helps us work through them more quickly.
Finding your Prince Charming or Princess Anna – and maintaining the relationships – will be a breeze thereafter. Will it be happily ever after? You decide! 🙂